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China’s Slowdown Tests Central Bank Amid Debate Over Easing

  • Economists divided over whether further RRR cuts are coming
  • PBOC’s latest report signals easing bias as growth slows
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China’s marked economic slowdown in the second half of the year is testing the central bank’s policy mettle and dividing economists over whether more aggressive action is needed to avoid a deeper downturn.

The People’s Bank of China is having to juggle multiple economic risks, pulling policy in different directions. Growth is heading for lows not seen since 1990 -- if last year’s pandemic year is excluded -- factory-gate inflation is soaring, while the currency is rallying on the back of record trade surpluses.